tv Fareed Zakaria GPS CNN May 16, 2010 1:00pm-2:00pm EDT
overspending, then that's a win, even if it's not the solution. thanks for watching "state of the union." for our international viewers, "world report" is next. for everyone else, "fareed zakaria gps" starts right now. welcome to "gps" the global public square, i'm fareed zakaria. a big week. hamid karzai was received in style in washington finally. europe got its act together and rescued greece, and stock markets worldwide rose in relief. and then there was the drama in britain. after a close election, britain finally arrived at its first coalition government since world war ii when winston churchill partnered with atly. its new prime minister, david cameron, is the first conservative to occupy 10 downing street in 13 years but he looks quite different from the prime ministers who preceded him. during the 1980s, conservatives ronald reagan and margaret
thatcher seemed to be ideological mates. angelo american conservatism seemed one grand movement. then in the 1990s, tony blair and bill clinton marched together and created a kind of happy, market friendly centrism. unlike america, which made a sharp turn from clinton to bush, britain continued with the blair consensus. now british conservatism, the only kind that can win elections, is softer, kinder and decidedly less confrontational. more comfortable with the state with nationalized health care, regulations, social services, environmentalism. it is markedly different from american conservatism these days. i interviewed david cameron in 2008 and he gave me his take on the difference between american and british conservatism. ever the astute politician, he
was careful not to distance himself too far from his conservative confederates in america. >> gun control or gay marriage, these aren't issues in the same way in british politics. in fact i've come out very strongly in favor of civil partnerships between gay people because i think what matters is commitment. i want to see more stable families and more people in stable relationships, and so we should celebrate civil partnerships. >> but how could that be right for britain but wrong for the united states? you are in effect saying the american conservative movement is on the wrong track. >> no, conservative movements because they come from different backgrounds they are often very different in different parties. take the issue of gun control. that's something that is very important in american politics. i think i understand why. i'm not sure i agree with them n britain gun control isn't an issue. we have very, very tight gun control. anyone with a gun has to have a
very tight sort of license. >> and no conservative argues. >> there's a history between britain and america because of what the right to bear arms meant in america. >> today american conservatism stands in a very different place than does david cameron and nick clegg's coalition. in fact it seems so very different from the republican party and the tea parties. what remains to be seen is who will influence whom across the atlantic. to discuss all this two very clever and entertaining british journalists and you'll love the accents, then an exclusive conversation with the prime minister of greece. are the greeks out of the woods? are we? a round table on the global economy with larry summers, the head of the imf and the finance ministers of france and singapore. and finally, his name, sergio
demello. sergio, as he was known to all, was one of the u.n.'s great diplomats. >> let's send this didn't i who's known as a cross between james bond and bobby kennedy, let's send sergio. >> as we walked along, i was looking and at one point i found a little spot of light down below. if you looked in there, i could see two people. >> you won't want to miss any of it. let's get started. joining me now with what are sure to be brilliant insights on the new british government, michael elliott, formerly the political editor of the economist and joanna coles, formerly of the guardian and the times of london, now the editor in chief of marie claire magazine. welcome to both of you. michael, it still doesn't look
like a grand conservative victory. this is 12 years of labor rule. you're almost set up as the opposition party to come into power and yet david cameron couldn't get an absolute majority. >> you're absolutely right. 13 years of labor, almost to the week. a deeply unpopular prime minister good fo good reasons or bad. an administration that got mired in scandal. other parties had too because of the parliamentary expenses. a deep economic recession. so there were many, many factors why you might have expected the opposition in power to absolutely sweep into the house of commons with an overall majority, pretty much able to do what it wanted. and david cameron did manage to do that. people have had a pretty good look at him. i would say that he is admired and respected but he is not loved by a broad swath of the british public yet. >> clearly what happened was labor lost the election. the conservatives didn't win it. and there was a very amusing
phrase about david cameron that he's too posh to wash which really goes down well, i think, with the majority of the british public who are suspicious of him. he went to eaton, he has a very strong sense of entitlement, which actually i don't think is necessarily true. i don't think he's actually like that, but his public image is of someone who's extremely privileged and whatever you think of what tony blair did to britain, he shifted britain into a thoroughly middle class country. and the middle class is a very suspicious of cameron. >> and it feels like it's not just him, it's the whole cohort around him. there's a bunch of people from very posh private schools. >> absolutely, absolutely. if you look at the pictures of the cabinet this morning, you will see that it is not in my view a cabinet that looks like britain. london is now 32% ethnic
minority. britain has become in a sort of enjoyable and unpredictable way a nicely mixed up place with polls and people from the subcontinent and people from everywhere making it a very, very international country. david cameron's cabinet looks pretty much a bunch of 40-something white guys. >> why did nic clegg's star power not translate. people had thought that he had kind of shot up and there was a sense that this was the liberal democrats moment. >> what we had for the first time ever in british elections were televised debates completely based on the american system. and nic clegg emerged as a very attractive, sbel jepintelligent hugely -- actually the public wanted to vote for his and there is that language.
david cameron is now living down when asked during the campaign what is your favorite joke, david cameron, he said nic clegg and he is now his deputy prime minister. >> british newspaper is influential in a way american newspapers are not and the conservative press really had a go at him when it looked like he was becoming a key figure in the election. >> you know, this is frankly the only shot these two men have of staying in power. it wasn't an overall, as we've said, an overall victory. the two of them will have to work very hard but the two are also from the same tribe. we talked about david cameron has having been eaton and oxford, nic clegg west to westminster and oxford. it's the princeton and harvard of britain. they share essentially similar values. they may be split, you know, by nuance over europe but essentially they speak the same language. if we were talking about an african election, we would say
they are from the same tribe. and i think that even in the humor of the press conference they gave together where they were laughing and joking and people are calling them tweedle cam and tweedle clegg there is an essential englishness to them which i think -- >> and you said englishness. >> the very englishman. and that gives them a sort of bond. and of course, you know, actually gordon brown wasn't english, he was scottish and represented a different part of britain. and i think people are anxious about this elitism that they see but there's a bloekishness to them and i think that will translate quite well. >> i think at times that young blokishness will be appealing. they're both extremely and attractive wives and families and there's going to be an immediate visual appeal of these two guys of their families and their blokishness and their ability to be self depp railway
katingly witty in that charmingly english way. but i think people might get tired of it. i think people might get tired of it. and i think people are in danger of underestimating how much britain changed in my view for the better during the 13 years of labor rule. it became a much more relaxed place. it became much more messy. it became much more var gated but it became more creative and more exciting. and i doubt that people will enjoy being governed by, as it were, two 43-year-old white male public school and oxford-educated blokes. >> on that note, thank you very much. we'll be right back. so there is a wrong picture sometimes, which is saying we're handing out money to greece. that's not so. we're paying back the loans we're getting.
>> but mr. prime minister, the loans will not be -- they will not be available to you at the rates that they are available to you without the german backup. at northern trust, we understand... that while you may come from the same family... you know, son, you should take up something more strenuous. you have different needs and desires. - i'm reading a book. - what's a book? so we tailor plans for individuals, featuring a range of integrated solutions. you at your usual restaurant? son: maybe. see you tomorrow. stairs? elevator. to see how our multi-faceted approach... can benefit your multi-generational wealth, look ahead with us at northerntrust.com. communities. industry. energy. her. this. lives. how ? by bringing together...
you hungry? yeah. me too. (door crashes in) (broadview alarm) (gasp and scream) go! go! go! go! go! go! (phone rings) hello? this is mark with broadview security. is everything okay? no. someone just tried to break in. i'm sending help right now. thank you. (announcer) brink's home security is now broadview security. call now to install the standard system for just $99. the proven technology of a broadview security system delivers rapid response from highly trained professionals, 24 hours a day. call now to get the $99 installation, plus a second keypad installed free. and, you could save up to 20% on your homeowner's insurance. call now - and get the system installed for just $99. broadview security for your home or business - the next generation of brink's home security. call now.
nearly $1 trillion, that's the size of the greek bailout package. it comes to almost $90,000 for each man, woman and child in greece. this enormous sum has settled the world's markets for now. but will it work? if it doesn't, you can probably expect another freefall. joining me now, the prime minister of greece, george papandreou. welcome, mr. prime minister. >> thank you very much, mr. z a/k/a a kchk akaris. >> you are going to take your gdp you promised from a deficit of 13% of gdp to 3% of gdp. to my knowledge that is the most
dramatic budget reduction in modern history. can you really do it? >> we're determined to do it and we already have results just in the first quarter of this year. we've cut the budget by 40% compared to last year, so that's beyond -- it's on target, i would say beyond our target. 10% up in revenues from vat and i think this determination is not just mine, it's not just my government's determination, it is the greek people's determination to turn things around, make big structural changes. >> you say that the greek people support you, but the images we see are of protests, of people striking, of even violence. this doesn't seem as though -- this seems like it's going to be politically very difficult. >> i would say in the polls, the opinion polls, even though people are unhappy about the measures, we have a majority that are supporting these measures, understanding that it's for the salvation of our country and our economy. >> one of the reasons europe was
reluctant was that the germans who were at the end of the day going to put up the bulk of the money were, i think, and i mean the german public was somewhat aghast to discover what kind of benefits the average greek worker, particularly worker for the public sector had. they were paid 14 months of salary for 12 months of work. some of them could retire at 55. now the germans looked at this and thought they had just gone through painful cuts of their own, their retirement age had been raised to 67 and so they were in effect being asked to use their taxpayer dollars to subsidize this rather cushy greek life. don't they have a point? >> well, let me answer to that. first of all, let me make sure that this is not money which is free. this is a loan. so there is a wrong picture sometimes, which is saying we're handing out money to greece. that's not so. we're paying back the loans we're getting. >> but mr. prime minister, the
loans will not be -- they will not be available to you at the rates they are available to you without the german backup. >> that's right. i think some of these comments have been unjust. also there's an image of greece. we have great tourist season where not only germans but many people from around the world come to greece and they have a lovely time. there's dancing, there's food, there's sun and the sea, but that's not the average greece that we live in. this is -- we work hard. we are a hard-working people. we're a proud people. and this is very easy to scapegoat greece. greek bashing which has gotten tangled in local and regional politics. what we're saying is we are ready to make the changes. greece is a proud nation. we have made our mistakes. we are living up to this responsibility. but at the same time give us a
chance. we'll show you. >> you know, you are in some ways the bellwether for the western world. you're the first western country that is going to try in a comprehensive way to pare back some of the excessive guaranties, exitments and -- commitments and expenditures of the welfare state. do you think you can do this and survive politically. i know you made reference to taking a voyage and a greek calm um nis said yeah, but it took him ten years, all his comrades died and he ended up naked and washed ashore in ithaca. do you think you'll have a few more people than he had when this journey is over? >> we know these journeys are not easy and there are casualties but we also know we can reach this goal. what we lived through in the last few months was also somewhat of a paradox because you -- and again, i'm not trying
in any way to get away from our responsibilities. we are fully aware of our responsibilities. but there are also the financial markets. in 2008 we had actually the governments coming in to bail out the financial markets and the banks. they had to accrue a huge debt. very often for stimulating the economies so that we don't go into not only a recession but a deep depression. now you have banks funding hedge funds that are actually then betting against governments that had actually helped the banks so this is a paradox. i think this is where we also need to regulate markets. >> do you think that greece was a victim of the american investment banks. >> we are right now have a parliamentary investigation in greece which will look into the past and see how things went the wrong direction and what kinds of practices were negative practices.
there are similar investigations going on in other countries and in the united states. this is where i think, yes, the financial sector, i hear the words fraud and lack of transparency so, yes, there is great responsibility here. >> could you imagine going after any of these banks legally? do you see that you have some legal recourse? >> i wouldn't rule out that this may be a recourse also to go into this legally. but we need to let the due process proceed and then make our judgments once we get the results from the investigations. >> and you think you will make it like adisias in the end, personally, politically? >> i am doing what is best for my country and i think that's the best way to make sure that this country does get to its destination, which is ithaca. what happens to me is of less importance, as long as i feel that i'm doing what is best for my country and i can sleep well
at night with my conscience clear, that maybe taking very tough decisions and decisions that very often hurt not only me but many of the greek people. but in the end knowing that this is the best. >> mr. prime minister, we wish you well on what is a hell of a challenge. best wishes and i hope we'll see you again. >> thank you very much, thank you for the opportunity you gave me to speak to you and your audience. >> and we will be right back. [ male announcer ] how can rice production in india affect wheat output in the u.s., the shipping industry in norway, and the rubber industry in south america? at t. rowe price, we understand the connections of a complex global economy. it's just one reason over 75% of our mutual funds beat their 10-year lipper average. t. rowe price. invest with confidence.
request a prospectus or summary prospectus with investment objectives, risks, fees, expenses, and other information to read and consider carefully before investing. lose weight and save money with our lowest price since 2004. i'm angie everhart, and i lost 34 pounds on nutrisystem. i lost 120 pounds on nutrisystem. enjoy four perfectly portioned meals a day with our best price guaranteed. i'm marie osmond, and i lost 50 pounds on nutrisystem. i lost over 100 pounds and lowered my blood sugar on nutrisystem d. based on the proven science of the glycemic index, nutrisystem works, and now it can work for you. that's me 22 pounds ago, and i'm never going back there again. roll back prices no matter who you are or what program is right for you. people say i look 10 years younger. i feel 10 years younger. smart money named nutrisystem the best value of popular weight-loss programs. now our best price just got better. with nutrisystem, there are no more excuses.
now for our what in the world segment. what got my attention this week was a new hbo film about a man who's been called a cross between james bond and bobby kennedy. his name, sergio demello. sergio, as he was known to all, was one of the u.n.'s great diplomats. >> never forget the real challenges and the real rewards
of serving the united nations are out there in the field where people are suffering, where people need you. >> and in the field is where he spent most of his time, posted in far flung failing nations everywhere from bangladesh to balkans to baghdad. he was called a master magician, mediator, manager and massager of egos. he came to the world's attention in the 1990s. his novel solution to a very grim refugee crisis, talked to the mass murdering criminals who had created the crisis in the first place. it was an idea that shocked his colleagues, but it worked. 400,000 refugees soon returned to their homes. in 2003, he was asked to go to baghdad to be secretary general kofi annan's special representative in iraq. he accepted, even though he had opposed the war and he tackled this impossible task with his usual energy. but then just three months into his posting, cameras were
rolling at the u.n. headquarters in baghdad when this happened. the head of al qaeda in iraq had ordered an attack on the u.n. headquarters and called for it to target sergio himself, reportedly telling a henchman to, quote, kill that criminal. the truck bomb blew up right under sergio's office. sergio had been meeting at the time in his office with an american professor named gil losher. he describes the scene. >> the flash is what i remember. the ceiling collapsed, the floor collapsed. we were thrust down.
i heard someone say, oh, shit, as if someone had expected it. i'm pretty sure it was sergio. >> when he was found in the rubble, sergio's first words were "don't let them pull the u.n. mission out of iraq." the man who found him was u.s. army reservist bill vonzaler. searching for survivors, he went up to the third floor where sergio's office had been. >> as we walked along, i was looking and at one point i found a little spot of light down below. if you looked in there, i could see two people. >> there at the bottom of a hole were sergio and the professor. army medic andre valentine was next on the scene. >> i looked at the hole and i just said holy crap. here would be the third floor. looking at it from the side.
when it collapsed, the roof basically went -- sergio's office would have been somewhere in here. the second floor had collapsed partially down. they were basically here. >> and despite amazing efforts for hours by these two u.s. soldiers, that is where sergio demello would die. now, the u.n. is often derided as this vast dysfunctional bureaucracy with a lot of talk but little action, and trust me living in the shadow of the headquarters here in new york i know the institution's failings as well as anyone. but sergio demello showed far from new york there is another u.n. that makes sure babies are inoculated, the homeless sheltered, the hungry fed. the people who work for u.n. agencies in the field in hellish
places for small salaries for years and years and years are doing truly amazing work and sergio reminds us of all those heroes out there. you won't want to miss this extraordinary hbo documentary. it airs on monday night at 9:00 p.m. eastern and pacific. set your vcr, set your dvr, set yourself on the couch. if you live outside the u.s., check your listings. and we'll be right back. your country is growing, i think, faster maybe than any country in the world. you're going to grow 10% this year. why are you doing so well? our . [ worker ] well, he is. last week he told my team about fedex office print online for our presentations. we upload it to fedex office, then they print, bind, and ship it. the presentation looks good, right? yes, but -- you didn't actually bring carl with you. good morning! but i digress. [ male announcer ] we understand. you need presentations done right. and right now save 20% on all online printing purchases.
tdd# 1-800-345-2550 investment firms wouldn't even dream of overcharging people. tdd# 1-800-345-2550 in fact, they'd spend all of their time dreaming up ways tdd# 1-800-345-2550 to give us more for our money. tdd# 1-800-345-2550 i guess i'd just like to see a little more give tdd# 1-800-345-2550 and a little less take, you know? tdd# 1-800-345-2550 if it was up to me, they'd spend a lot more time tdd# 1-800-345-2550 worrying about my bottom line. tdd# 1-800-345-2550 (announcer) at charles schwab, investors rule. tdd# 1-800-345-2550 are you ready to rule? great conspiracy theories abound about who does and does not control the world economy. well today, i have assembled a bunch of folks who you could argue actually do. this is not the tri-lateral commission, this is just gps, but we have with us christine lagarde, who is the finance minister of france, lawrence summers, a former secretary of
the treasury, now serves as the head of the white house economic council, tarman shanmugaratnam is the finance minister of singapore and dominique strauss-kahn is the managing director of the international monetary fund. tharman, your country is growing i think faster than maybe any country in the world. singapore grew 30% and you're growing 10% this year. why are you doing so well? >> i think first it's about something that's happening in asia. first we will not -- we were not badly affected by the crisis. at least there was no domestic reasons on financial systems. everyone went down in the crisis. we are coming up a little faster than more spots of the world. so there is a shift towards asia increasingly year by year and the crisis has accelerated that shift. but we are fundamentally in a world where we have to expect that growth will be a little slower overall than we would
desire. for the next five, maybe even seven, eight years. >> why has this shift to asia been accelerated by the crisis? why is asia booming? >> quite frankly for reasons that are of a competitive nature. it's a competitive place. people work hard, they adjust easily. there's an insatiable demand for training, learning english, learning technical skills. everyone wants to improve and every parent wants their kids to do much better than them. >> larry, let me ask you about the state of the american economy. when you look at the numbers, we seem as though we're going to grow 3% this year. on a post-war basis that's pretty anemic growth for a very sharp contraction. why do you think that this recovery does not have the kind of traditionally people say if you shrink 3%, you will grow two times three, which will be 6%. why are we not growing that fast? >> recessions associated with bubbles bursting, with
overleveraging historically whether you look at the real disasters, like the depression or japan in the 1990s or you look at some of the smaller events tend to have more protracted recoveries. let's step back. we're in a very different place than we were a year ago. a year ago the economy was collapsing, people were talking about depression. it was pulling the rest of the world down. people thought we would be mired for years. so i think we're doing better than almost anyone expected us to do a year ago. >> dominique strauss-kahn, when you look at this recovery, are you comfortable that it's going to be robust or do you worry that a lot of it has been fueled by government stim lafb measures, by government spending a lot of money. that when the money runs out you
may be in a very perilous period when the economies start moving back down. >> the big picture is recovery is back. i tried to say many economies, including advanced economy, are still fuelled by public support and private demand is still weak. that's why we shouldn't believe we're out of the woods. the news is much better. the world is a better place than one year ago but the world is still a dangerous place. >> christine, when you look at this crisis and step back, a lot of people would argue one fundamental driver was the very low interest rates that fueled a lot of bubbles. the cost of capital collapsed between 2004 and 2007 and made people do stupid things in all kinds of areas. so the cost of capital is now very low. interest rates are at the lowest rates in two generations. isn't it possible that we are fuelling new bubbles? if so, shouldn't that worry us all? >> we had to refuel.
that's really what happened about a year ago. if you look at what we did, we managed to kick start the economy. we managed to avoid protectionism, which could have taken place. and we started regulating the financial system in a better way, which was an absolute must. and to do all that, we had to collectively, us, member states from all around the world, we had to refuel because there was nobody else and nothing else available. >> so let's talk p financial reform. dominique strauss-kahn, whoever in your organization came up with the acronym for the tax you have proposed deserves a gold medal because it is exquisitely named the fat tax. other countries have vat taxes, you are row posing a fat tax, a financial activities transaction tax. the idea is to achieve global commonality along the lines
larry summers is suggesting but france has immediately said as far as i can tell, wait a minute, we don't have banks that need to be taxed. singapore isn't going along with it, tokyo isn't going along with it, canada isn't going along with it so there you have four important centers not going along with it. >> we had a risk of this being named the fat cat tax so the solution finally wasn't that bad. i will let the different men of this panel enter for their own country, but one of the big legacies of this crisis is that we avoid something as big as the great depression everybody was talking about eight months ago because we had a huge level, unparalleled level of economic policy cooperation. we need to have the same level of coordination that we had during the crisis, and that's what we're arguing. >> so will france go along with the fat tax? >> yes. not exactly necessarily along
the lines of what dominique is proposing, but in essence we are very supportive of the proposal. and certainly i see it as my duty to make sure that we have in place a system that stops players from taking unnecessary, excessive, abusive risks that put the whole system in play. >> bill clinton in an interview said when asked about derivative regulation, he said bob reuben and larry summers gave me the wrong advice and i was wrong to take it. have you changed your mind on these issues? >> canes was once asked are you saying something different than you used to say, why is that. and he responded, when conditions change, i change my views. and you. and i think that's the situation we're looking at. >> churchill said only stupid people don't change their mind. >> very good. credit default swaps were in their infancy in the 1990s.
there was no large market in them. and yet we've seen how much damage they did. that's a very different kind of need. that has been pointed up and why we've worked so hard to strengthen derivatives, strengthen derivatives regulation, to take just one example. we've seen what damage can be done by leverage. in the '90s as secretary of the treasury, i warned about the dangers of the leverage associated with fannie mae and freddie mac. those dangers have become more pervasive over the last ten years. so i think there has always been a case, and it's one i've always tried to make, for regulation. but that case has certainly gotten stronger, given what has happened. but what the international community should resist is an attempt to place one set of
standards on foreign banks and a different and lower set of standards on one's own institutions. >> and we will be back in a moment to discuss much more about the global economy and the next potential crisis. what would be wrong with letting greece go under? it would be a good disciplining force for the rest of the world. nutrisystem's roll back sales event: lose weight and save money with our lowest price since 2004.
i'm angie everhart, and i lost 34 pounds on nutrisystem. i lost 120 pounds on nutrisystem. enjoy four perfectly portioned meals a day with our best price guaranteed. i'm marie osmond, and i lost 50 pounds on nutrisystem. i lost over 100 pounds and lowered my blood sugar on nutrisystem d. based on the proven science of the glycemic index, nutrisystem works, and now it can work for you. that's me 22 pounds ago, and i'm never going back there again. roll back prices no matter who you are or what program is right for you. people say i look 10 years younger. i feel 10 years younger. smart money named nutrisystem the best value of popular weight-loss programs. now our best price just got better. with nutrisystem, there are no more excuses. the nutrisystem roll back sales event won't last long. call the number on the screen for our best price guarantee. sfx: coin drop sfx: cg have you heard?
saving time, money and for the future has never been simpler. regions lifegreen checking and savings accounts come with a personal savings review, up to a $250 annual savings account bonus, and free online and mobile banking for simple and safe banking anytime, anywhere. just drop by or visit regions.com/open to open your accounts and get into the rhythm of saving. regions it's time to expect more.
mile-long tube into the leaking pipe today. the tube became dislodged but crews apparently reinserted it. cnn's david mattingly joins us from new orleans with more on this effort. david. >> reporter: after more than a week of failures, bp today finally announcing some success in stemming the flow of oil into the gulf of mexico. as you described, that mile-long pipe, the end of it has been inserted into that leaking pipe at the bottom of the gulf of mexico. and they are reporting they had some success when they tested this in pumping that oil up to a containment vessel at the surface. during that test, however, the pipe became dislodged. they had to put it back into place and now it's unclear if they're actually operational at this moment. but they are declaring that there was success when they tested this pipe. it worked the way they had hoped it would. it's also unclear exactly how much of this oil they intend to collect here. reading from the press release they just sent out, while not
collecting all of the leaking oil, this tool is an important step in reducing the amount of oil being released into the gulf of mexico. so far it is the only successful step at reducing the oil going into the gulf of mexico. over a week ago they had ahuge failure with that colossal four-story containment dome. today finally the first amount of success to report. >> operative words there, david. you said reduces the oil leak. this does not stop it. it does not contain the oil leak. however, this is considered fairly significant why? >> reporter: because this is the first step at slowing down the amount of oil that's actually going into the water. at some point they were saying 80 to 85% of the oil might be collected when they were using the containment dome. they have never offered a solid figure or an estimate about what they plan to do with this device. we hope to find out more later and get more details of just how successful this success moment truly is. >> all right, david mattingly,
thanks so much. we'll talk about at the top of the hour in the 2:00 eastern hour. those are the top stories. more fareed zakaria gps next. energy. her. this. lives. how ? by bringing together... information. ... people ... ... machines ... ... systems ... ideas... verizon helps businesses worldwide... including fortune 500 companies... find and achieve... better. better. better. better. [ male announcer ] we call it the american renewal. because we believe in the strength of american businesses. ♪ ge capital understands what small businesses need to grow and create jobs. today, over 300,000 businesses rely on ge capital for the critical financing they need to help get our economy back on track. the american renewal is happening right now.
i thought you said carl was our best presentation guy. [ worker ] well, he is. last week he told my team about fedex office print online for our presentations. we upload it to fedex office, then they print, bind, and ship it. the presentation looks good, right? yes, but -- you didn't actually bring carl with you. good morning! but i digress. [ male announcer ] we understand. you need presentations done right. and right now save 20% on all online printing purchases. visit fedex.com/print. affect wheat output in the u.s., the shipping industry in norway, and the rubber industry in south america? at t. rowe price, we understand the connections of a complex global economy. it's just one reason over 75% of our mutual funds beat their 10-year lipper average. t. rowe price. invest with confidence. request a prospectus or summary prospectus
with investment objectives, risks, fees, expenses, and other information to read and consider carefully before investing. that rules the world, dominique strauss-kahn of the imf, larry summers of the united states and christine lagarde of france. let's talk about the rest of the world. what would be wrong with letting greece go under? it would be a good disciplining force for the rest of the world? >> it's never good. it's never good. not only for the country, but also for the surrounding countries. and altogether, i'm convinced
that it would be impossible to have greek coming back in a situation. i'm not saying it won't be painful, it will be. it will be painful, but at the cost to have a safer economy. >> so, larry, is greece's present california's future? there is a distinguished historian, neil ferguson, who i think you hired when you were president of harvard, who wrote an article saying that, that the sovereign crisis in greece, that this is basically what american states are going to have to deal with and that they'll have to make the kind of very painful adjustments that greece is going to have to make. >> i think it's important to recognize that if you look at the size of greece's debt relative to greece's income, it's probably five to ten times the size of california's debt relative to california's income. if you look at the size of government in greece relative to the size of state governments in california, you're talking about a very, very different
comparison. but if you ask, do we have profound fiscal issues in the united states at the state level, or do we in all likelihood have profound issues at the federal level, absolutely, we do. >> so when looking at the current world economy, brazil's central bank recently said two problems that dominate the world economy right now, the two great problems, the first, he said, is slow growth, which i think we've all talked about. the second, he said, is china's undervalued currency. the indian central banker has made similar statements, not quite as dramatic, and your prime minister, tharman, has said that china should basically revalue its currency. >> i think basically, yes. stability at a time when there was instability all around the place. should they now go back to where they were before the crisis, which is a path of gradual
appreciation, that a more flexible exchange rate allowed, i think that's sensible. first, because inflation is going to be become an increasing concern in china. they are concerned about it. second, because it will be part and parcel of achieving a higher standard of living. as in all developing countries, as you grow, as your productivity goes up, if you want people to be able to enjoy your high standard of living by consuming more, it goes with a stronger exchange rate. >> christine, when the united states has tended to raise this issue, it has often been seen as a u.s./china issue. it's now being seen as many countries who share the same concern, that china's undervalued currency is causing a distortion in global trade. do you think it's possible for other major countries to prevail upon china to think about this in a -- you know, to revalue its currency? >> i agree with tharman.
i think it will be china and prevailing upon itself and realizing that it's in their own self-interest to re-appreciate or to appreciate the currency. and it's a matter of self-confidence, understanding the situation, taking time into account, but i think it will be china prevailing upon itself. very much so. >> tharman, i'm going to give you the last world because you're in a small, highly successful country, watching these giants of the international economy, and your fate depends entirely upon how the elephants move around. are you convinced that with all these big, powerful countries desperately trying to stimulate growth, keep interest rates low, spending lots of government money, flooding either markets with liquidity, that we are fine and we're not creating another crisis that could -- that could -- another big bubble that's going to pop?
>> if you ask me, the basic direction of travel is right. we've got good philosophical arguments for many pieces of reform that we want to make in the systemp let's focus on where the risks are and apply higher standards to where the risks are. i'm not so keen on focusing who should do what, but focus on risk. fundamentals matter. try not to get too complex because in finance, when you get too complex, the inmates take over the asylum. >> but do you worry about the next crisis? >> we will have a next crisis. we want to make sure we don't get a blowout the way we got this time. and when we do get the next crisis, we want to make sure that there's a more orderly and not a destabilizing way of resolving problems with individual institutions. >> on that note, dominique strauss-kahn, tharman, larry
summers, christine lagarde, thank you all very much. and we will be right back. hey, i'm don shula, and i lost 32 pounds on nutrisystem. and i'm mary anne shula, and i've lost 23 pounds on nutrisystem. nutrisystem silver for 2010, the weight-loss program designed for older americans. now you can lose weight and feel great again! let's face it, the older you get, the harder it is to lose weight. not anymore, honey. it's easy with nutrisystem. for a limited time, get our best tv offer: four weeks free! that's right, you can get an extra 28 breakfasts, 28 lunches, 28 dinners, and 28 desserts. that's 112 meals free just for starting today. i look and feel so much better, and so does coach. i'm back to my playing weight. nutrisystem silver is based on the breakthrough science of the glycemic index, high in fiber and p÷od carbs to keep you feeling fuller longer and help consistently burn calories. this is the kind of food you grew up loving:
pizza, burgers, lasagna. and don't forget the chocolate, honey. i love chocolate. order now and you can get an extra four weeks of meals free. that's right, 112 meals absolutely free. even the shipping is free. with nutrisystem, there's no counting, no measuring, and no embarrassing weigh-ins. it's a no-brainer program. order today. nutrisystem silver can change your life. people say i look 10 years younger. hey, i feel 10 years younger. coach used to shuffle when he lked. now we both take the stairs like kids. smart money named nutrisystem the best value of popular weight-loss programs. trust me, you will lose weight. see how nutrisystem silver can change your life. for a limited time, get our best tv offer: four weeks free! that's right, you can get an extra 28 breakfasts, 28 lunches, 28 dinners, and 28 desserts, 112 meals absolutely free. call or click now. get back in the game.
now for our question of the week. here's what i want to know. from what you've heard, which brand of conservatism do you prefer? the british variety or american. let me know what you think. don't forget to subscribe to our podcasts on itunes. that way you'll never miss a show and you can't beat the price. it's free. now, as i do every week, i want to recommend a book. it's called "the end of the free market: who wins the war between states and corporations." it's by a pastgu